MB-920 Describe Dynamics 365 Finance Practice Question
You are a Dynamics 365 Finance consultant for a service company that uses the Project management and accounting module. They need to track project costs and revenue, and bill customers based on time and materials. The company wants to use the 'Work in process' (WIP) accounting method to recognize revenue as costs are incurred. They also need to automatically generate invoices based on project progress. Requirements: 1) Use WIP accounting for projects. 2) Automate invoice generation. 3) Use standard features. Which configuration should you set up?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Set up a project group with 'Time and material' project type, enable WIP accounting, and define billing rules.
It configures a 'Time and material' project group with WIP accounting enabled and defines billing rules. This setup automatically recognizes revenue as costs are incurred (WIP method) and allows automatic invoice generation based on progress. Option A (accruals) is for non-WIP methods and periodic tasks are not automated. Option B (Fixed-price) is incorrect because the company uses time and materials billing. Option C (manual invoices) does not automate invoice generation. D matches all requirements using standard features.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Enable 'Accruals' in project parameters and use periodic tasks to generate invoices.
Why it's wrong here
Accruals are not the same as WIP.
- ✗
Configure a project group with the 'Fixed-price' project type and use progress billing.
Why it's wrong here
Fixed-price is not time and materials.
- ✗
Use the 'Cost record' journal to post costs and manually create invoices.
Why it's wrong here
Manual invoicing does not meet automation requirement.
- ✓
Set up a project group with 'Time and material' project type, enable WIP accounting, and define billing rules.
Why this is correct
Time and material with WIP and billing rules automate invoicing based on costs.
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